Z. Pvt. Ltd. has to pay Rs. 1,00,000 to R. Ltd. Z Ltd. issues a debit note of Rs 10,000, on Z Pvt. Ltd. Making amount payable to Rs. 90,000. Now Z pvt. Ltd cuts TDS on entire amount of Rs. 1,00,000. Is this correct/incorrect? And why?
I think : TDS is a form of paying tax in advance, and thus TDS should be cut on RS. 90,000 and not on the whole amount of Rs. 1,00,000.
@ Jason Sanctis
Assassee has to deduct TDS (wherever applicable) on DUE or PAYMENT, whichever is earlier, BASIS on the entire amount.
So in the given case one should deduct TDS on the entire amount......
i.e on Rs. 1,00,000/-
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